Indian farmer suicides hit record high

A record 105 Indian farmers committed suicide in one of India's most prosperous states last month after they were unable to repay loans to banks, an activist group has said.

03 Sep 2006 14:44 GMT

India has a recent history of farming disasters

The farmers killed themselves in the cotton-growing districts of Maharashtra state during August, taking the toll of suicides this year to 814, said Vidarbha Jan Andolan Samiti activist group in its report.

The deaths came despite a $815 million (37.5 billion rupee) aid package pledged by prime minister Manmohan Singh in July for the six drought-hit districts in the Vidarbha region.

At the time, Singh acknowledged increase of debt among farmers and said that the “national problem” needed urgent attention.

The aid package was not enough to address the crippling debt among the farmers, said Kishore Tiwari, president of the Vidarbha Jan Andolan Samiti, which keeps a daily log on farmers' deaths in the region.

Tiwari said the government's plan has failed because it ignored two key demands; a complete waiver of loans owed by Vidarbha farmers to banks and a minimum procurement price of $650 (30,000 rupees) per ton of cotton.

The package included a waiver-only for interest charges, and Singh said state-run banks and financial institutions would reschedule some $280 million (13 billion rupees) in loans to the farmers.

In the past five years, cotton prices in India have dropped from $600 (27,000 rupees) per ton to $370 (17,000 rupees) per ton.

Problems compounded

Farmers have complained that the interest rate on money borrowed from local lenders was “exorbitant”, along with rising electricity and fertiliser costs.

Meanwhile the Indian government has increasingly cut subsidies under an economic liberalisation program it launched in 1991.

India's agriculture is largely dependent on seasonal monsoon rains, but erratic rainfall and crippling water shortages over the past five years have caused added problems for farmers.